US accuses Brazil of helping China dodge tariffs and places country on high commercial risk list

The United States government included Brazil on a list of more than 40 countries that it accuses of helping China evade import tariffs. Beijing would be doing this by sending its products to other countries for packaging and assembly, a practice known as transshipping, according to a report released this Thursday (13/08). The tactic would have had the effect of disguising American imports from China, which despite having decreased at first glance, would continue to threaten factories and jobs in the USA and generate annual billion-dollar losses in tax revenue. "For years, the great trade transshipment scam allowed communist China to launder its exports," said White House trade advisor Peter Navarro, presenting the report to journalists. Navarro, however, highlighted that the problems highlighted mainly concern other nations that facilitate tariff evasion. The report classifies countries into three levels of ties to Beijing. Brazil was included in "level 2", classified as "significant economic integration", alongside countries such as Indonesia, Malaysia, Thailand, Turkey and Vietnam. According to the White House, these countries combine significant volumes of commercial transshipment with deeper integration with supply chains linked to China, manufacturing platforms, logistics systems or regional channels for redirecting goods. Brazil, as an "important regional production and logistics platform", would act to simulate the transformation of products to change their declared origin. EU was also framed by the White House. "Level 1", which brings together Canada, the European Union, India, Israel, Japan, Mexico, South Korea and Taiwan, would carry out commercial transshipment of the "largest absolute volumes", with "risk embedded in broad and legitimate trade flows". Experts have observed deviations in supply chains involving China for years since the first Trump administration, when Washington and Beijing fought a tariff war in 2018. The Chinese government has classified its relationship with the United States as one of "strategic stability". Still, its policies supporting exports of manufactured goods have destabilized the automotive, metallurgical and electronics sectors in the United States, Europe, Japan and other regions. Navarro said other countries, such as India, could also resort to commercial transshipment to avoid new tariffs. According to him, the new trade agreements promoted by the Trump administration will include clauses to punish partners who adopt this practice. US trade balance still in deficit despite tariffs The Trump administration has imposed high tariffs on much of the world in an attempt to protect American manufacturers, hitting allies and rivals with import taxes. At the same time, these tariffs created new inflationary pressures within the United States. The report presents a series of estimates on the size of commercial transshipment intended to avoid tariffs. Based on government and private sector data, it is estimated that between $34.2 billion and $303 billion worth of goods are redirected annually. To address the problem, Navarro said U.S. Customs and Border Protection (CBP) has begun using artificial intelligence in a pilot program to prevent commercial transshipment. According to him, when it is proven that an importer falsified the origin of a product, tariffs can be applied retroactively, covering approximately the previous year. Tariffs imposed by Trump during his second term have faced a series of legal challenges. In February, the Supreme Court struck down some of them. The United States continues to import more than it exports to the rest of the world. However, the trade deficit accumulated so far this year, at $371 billion, is around $189 billion below that recorded in the same period last year.